Lawmakers urge OCC to rescind, replace cryptocurrency guidance

U.S. Sens. Elizabeth Warren (D-MA), Dick Durbin (D-IL), Sheldon Whitehouse (D-RI), and Bernie Sanders (I-VT) recently forwarded correspondence to the Office of the Comptroller of the Currency Acting Comptroller of the Currency Michael Hsu, advocating for the previously issued cryptocurrency guidance to be rescinded and replaced.© Shutterstock “We write to inquire about the Office of […]

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U.S. Sens. Elizabeth Warren (D-MA), Dick Durbin (D-IL), Sheldon Whitehouse (D-RI), and Bernie Sanders (I-VT) recently forwarded correspondence to the Office of the Comptroller of the Currency Acting Comptroller of the Currency Michael Hsu, advocating for the previously issued cryptocurrency guidance to be rescinded and replaced.

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“We write to inquire about the Office of the Comptroller of the Currency’s (OCC) November 2021 interpretive letter authorizing banks to engage in certain cryptocurrency (crypto) activities and the activities that banks have been permitted to engage in under OCC’s guidance,” the legislators wrote. “Each of the prudential regulators, including the OCC, is responsible for safeguarding our financial system from undue risk and ensuring the safety and soundness of the banking system. In light of recent turmoil in the crypto market, however, we are concerned that the OCC’s actions on crypto may have exposed the banking system to unnecessary risk and ask that you withdraw existing interpretive letters that have permitted banks to engage in certain crypto-related activities.”

Under the previous acting comptroller, the OCC issued several interpretive letters related to cryptocurrency, which determined that banks were authorized to engage in certain crypto-related activities that included providing cryptocurrency custody services for customers, holding deposits that serve as reserves for certain stablecoins, and using independent node verification networks (INVNs) and stablecoins for payment activities.

“Given the risks posed by cryptocurrencies to banks and their customers, we request that you withdraw OCC Interpretive Letters 1170, 1172, 1174, and 1179 and coordinate with the Federal Reserve and the Federal Deposit Insurance Corporation to develop a comprehensive approach that adequately protects consumers and the safety and soundness of the banking system,” the legislators concluded.

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CFPB rule outlines digital marketing finance protection compliance

The Consumer Financial Protection Bureau (CFPB) has issued an interpretive rule detailing when financial firm digital marketing providers must comply with federal consumer financial protection law. © Shutterstock “When Big Tech firms use sophisticated behavioral targeting techniques to market financial products, they must adhere to federal consumer financial protection laws,” CFPB Director Rohit Chopra said. […]

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The Consumer Financial Protection Bureau (CFPB) has issued an interpretive rule detailing when financial firm digital marketing providers must comply with federal consumer financial protection law.

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“When Big Tech firms use sophisticated behavioral targeting techniques to market financial products, they must adhere to federal consumer financial protection laws,” CFPB Director Rohit Chopra said. “Federal and state law enforcers can and should hold these firms accountable if they break the law.”

Digital marketers executing the role of service providers can be held liable by the CFPB or other law enforcers for committing unfair, deceptive or abusive acts or practices, in addition to other consumer financial protection violations.

When digital marketing providers extend beyond traditional advertising, they are typically covered by the Consumer Financial Protection Act. The measure contains an exception for companies solely providing time or space for advertising a consumer financial product or service through print, newspaper or electronic media.

The CFPB maintains that the exception does not cover firms materially involved in developing a content strategy.

The CFPB’s interpretive rule, officials indicated, explains that digital marketers who provide material services to financial firms and other consumer protection enforcers can sue digital marketers to stop consumer financial protection law violations.

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FHFA details requirements for servicers maintaining fair lending data

The Federal Housing Finance Agency (FHFA) notes that Fannie Mae and Freddie Mac will require mortgage lenders and servicers to transmit fair lending information to servicers with other loan information.© Shutterstock According to the FHFA, the requirement will include a borrower’s language preference, with data to be maintained containing the borrowers’ age, race, ethnicity, and […]

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The Federal Housing Finance Agency (FHFA) notes that Fannie Mae and Freddie Mac will require mortgage lenders and servicers to transmit fair lending information to servicers with other loan information.

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According to the FHFA, the requirement will include a borrower’s language preference, with data to be maintained containing the
borrowers’ age, race, ethnicity, and gender, and transferred with servicing throughout the mortgage term.

“The need for collection and maintenance of quality fair lending data is a lesson learned from the foreclosure crisis and COVID-19 response,” FHFA Director Sandra L. Thompson said. “Having fair lending data travel with servicing will help servicers do the important work of providing assistance to borrowers in need, helping to further a sustainable and equitable housing finance system.”​

The servicer requirement is slated to be implemented on March 1, 2023, following a May 2022 announcement indicating lenders would collect borrowers’ language preference data.

Senate Committee on Banking, Housing and Urban Affairs Chairman Sherrod Brown (D-OH) recently commended FHFA for requiring lenders to collect a borrower’s language preference and housing counseling information when they apply for a mortgage.

“It’s common sense – if you’re talking with a homeowner or trying to help them get back on track with their payments, you should know what language they’re most comfortable with,” Brown said in a statement regarding the FHFA maintenance requirements.

Brown said the action would ensure the nation’s housing system serves all eligible homebuyers.

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OCC to Host Virtual Innovation Office Hours

The Office of the Comptroller of the Currency (OCC) today announced that it will host virtual Innovation Office Hours on September 28-29, 2022, to promote responsible innovation in the federal banking system.

The Office of the Comptroller of the Currency (OCC) today announced that it will host virtual Innovation Office Hours on September 28-29, 2022, to promote responsible innovation in the federal banking system.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2022/nr-occ-2022-97.html

Bill eyes bolstered 501(c)(4) organization transparency

U.S. Rep. Eleanor Holmes Norton (D-DC) has introduced a bill she said provides greater transparency with regard to 501(c)(4) organizations.© Shutterstock Norton indicated the Increased Transparency in 501(c)(4) Organizations Act of 2022 requires the Internal Revenue Service (IRS) to make publicly available the forms organizations self-declaring under Section 501(c)(4) of the Internal Revenue Code (IRC) […]

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U.S. Rep. Eleanor Holmes Norton (D-DC) has introduced a bill she said provides greater transparency with regard to 501(c)(4) organizations.

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Norton indicated the Increased Transparency in 501(c)(4) Organizations Act of 2022 requires the Internal Revenue Service (IRS) to make publicly available the forms organizations self-declaring under Section 501(c)(4) of the Internal Revenue Code (IRC) file with the IRS.

“To be eligible for tax-exempt status under 501(c)(4), organizations, often referred to as social welfare organizations, must be devoted exclusively to charitable, educational, or recreational purposes,” Norton noted via a statement. “They can apply for 501(c)(4) status, or they can self-declare. Previously, organizations seeking to self-declare were not required to notify the IRS of their existence. In 2015, however, the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which required an organization seeking to self-declare to file a notice with the IRS, was enacted into law. The PATH Act did not, however, make the filed notices, Form 8976, subject to public disclosure.”

Per Norton, the IRS maintains Form 8976 cannot be made available under the Freedom of Information Act or other disclosure laws, creating a discrepancy between those organizations for which the IRS must make publicly available information and self-declared 501(c)(4) organizations.

“My bill would fix this discrepancy by requiring the IRS to publicly disclose any filed Form 8976 upon request, thus allowing the public to know which organizations operate under 501(c)(4), as they do with organizations that operate under 501(c)(3),” Norton concluded. “In the aftermath of the Supreme Court’s Citizens United decision, which allows unlimited expenditures in political campaigns by these social welfare organizations, greater transparency is needed.”

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Rep. Wild introduces bill to overhaul student loan repayment system

U.S. Rep. Susan Wild (D-PA) introduced legislation this week that would restructure the federal student loan repayment system.© Shutterstock Americans hold more than $1.5 trillion in student loan debt, and federal loans account for much of this debt. Many Americans are at risk of defaulting on their student loans because of high interest rates and […]

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U.S. Rep. Susan Wild (D-PA) introduced legislation this week that would restructure the federal student loan repayment system.

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Americans hold more than $1.5 trillion in student loan debt, and federal loans account for much of this debt. Many Americans are at risk of defaulting on their student loans because of high interest rates and unaffordable monthly loan payments. Wildʻs bill, the Simplifying Student Loans Act, H.R. 8700, seeks to reduce the financial burden on current and future borrowers in several ways.

First, it would overhaul the loan repayment process. Specifically, it would replace the numerous existing federal student loan repayment plans with two repayment options: one fixed repayment plan and one income-based repayment plan. Research shows that borrowers enrolled in income-based repayment plans have better outcomes, lower monthly loan payments, and are less likely to default on their student loans.

Further, the bill limits the amount of a person’s monthly discretionary income that they must spend on student loan payments, which will help them afford their monthly payments.

Finally, it would establish a one percent interest rate on federal student loans. This is significantly lower than the current average student loan interest rate.

Taken together, said Wild, these updates would reduce the strain on students and families, help them achieve their long-term financial goals, and strengthen the economy.

“Whether it’s a four-year college, community college, or a technical school, we know higher education is a pathway to financial stability in America,” Wild said. “But with prohibitively expensive tuition, students often must take out multiple loans to pay for college — each with its own interest rate and repayment schedule. I’ve heard heartbreaking stories of people drowning in student loan debt and owing more in loans 10 years post-graduation than immediately after earning their diploma. By making student loans easier to understand and cheaper, simpler, and quicker to repay, the Simplifying Student Loans Act will help solve these problems.”

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Read more / Original news source: https://financialregnews.com/rep-wild-introduces-bill-to-overhaul-student-loan-repayment-system/

NAFCU offers feedback to Treasury Department on development of digital assets

The National Association of Federally-Insured Credit Unions (NAFCU) provided feedback to the Treasury Department on its request for comments (RFC) on the responsible development of digital assets.© Shutterstock The Treasury Department has requested feedback on implications of the development and adoption of digital assets, such as a central bank digital currency (CBDC), and the changes […]

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The National Association of Federally-Insured Credit Unions (NAFCU) provided feedback to the Treasury Department on its request for comments (RFC) on the responsible development of digital assets.

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The Treasury Department has requested feedback on implications of the development and adoption of digital assets, such as a central bank digital currency (CBDC), and the changes that could be expected in financial markets and payment systems.

On the subject of private sector digital asset regulation, NAFCU Senior Counsel for Research and Policy Andrew Morris conveyed his thoughts in a letter to the Treasury. In summary, Morris outlined some overriding principles that NAFCU believes should be included in any future framework.

One of those key principles is to establish a level playing field for credit unions, banks, and other financial companies seeking to engage with digital asset technologies. Also, he advocated for the application of consumer protection laws to entities facilitating consumer engagement with digital assets. Finally, he said it should include support for responsible innovation within the credit union industry.

In addition, Morris asked the Treasury to clarify that references to insured depository institutions included in the President’s Working Group on Financial Markets’ Report on Stablecoins are inclusive of federally insured credit unions.

On the matter of a CBDC, Morris reiterates NAFCU’s position that the costs would outweigh the benefits. This is a position that the association has communicated previously to the Federal Reserve and Commerce Department. NAFCU contends that superior alternatives exist for accomplishing the same objectives.

“Given the lack of clarity regarding specific CBDC parameters and design features, NAFCU does not believe that sufficient evidence exists to justify development of a CBDC, particularly when better alternatives for achieving the same purported benefits already exist,” wrote Morris. “Credit unions are well positioned to improve underserved populations’ access to affordable financial products and their efforts do not depend upon the introduction of a CBDC.”

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Seattle legislation targets greater cannabis equity

Seattle city officials introduced three bills they said seek to enhance cannabis equity efforts. © Shutterstock Seattle Mayor Bruce Harrell recently joined Councilmember Teresa Mosqueda (Position 8 – Citywide) in proposing a suite of bills that advocate for a more diverse industry while supporting cannabis store workers. “For a thriving Seattle economy, every worker and […]

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Seattle city officials introduced three bills they said seek to enhance cannabis equity efforts.

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Seattle Mayor Bruce Harrell recently joined Councilmember Teresa Mosqueda (Position 8 – Citywide) in proposing a suite of bills that advocate for a more diverse industry while supporting cannabis store workers.

“For a thriving Seattle economy, every worker and business deserve safety and the opportunity to learn, grow, and prosper,” Harrell said. “As the cannabis industry continues to develop, we must course correct and support the communities who too often have been left behind. Equity in this industry means safe working conditions and fair treatment for workers, store ownership that includes the communities most impacted by the war on drugs, and a commitment to fairness, innovation and opportunity.”

Bill provisions, per authorities, include establishing a city-level social equity license to reduce barriers toward opening cannabis stores for underrepresented communities and those impacted by the war on drugs; setting a foundation for future cannabis-related businesses, in collaboration with the Washington State Liquor and Cannabis Board as a means of issuing licenses via a social equity framework; requiring a 90-day retention of store workforce when ownership changes; and creating a short-term cannabis advisory committee selected in conjunction with the Seattle City Council as part of an effort to collect cannabis equity feedback from workers, community members and industry leaders.

“After years of community asking for greater equity in the cannabis industry, this legislation represents an initial step in the right direction towards creating local equity applications, improving workforce standards, and focusing on safety for workers in the cannabis industry,” Mosqueda said.

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CFPB Takes Action to Protect the Public from Shoddy Data Security Practices

The Consumer Financial Protection Bureau (CFPB) confirmed in a circular published today that financial companies may violate federal consumer financial protection law when they fail to safeguard consumer data. The circular provides guidance to consumer…

The Consumer Financial Protection Bureau (CFPB) confirmed in a circular published today that financial companies may violate federal consumer financial protection law when they fail to safeguard consumer data. The circular provides guidance to consumer protection enforcers, including examples of when firms can be held liable for lax data security protocols.

Read more / Original news source: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-to-protect-the-public-from-shoddy-data-security-practices/

CUNA advocates digital assets framework

Credit Union National Association (CUNA) officials are advocating that the Treasury Department consider a comprehensive digit assets framework that would enhance adoption efforts.© Shutterstock “Credit unions have a long history of serving their members in a direct, individualized way that encourages their financial health and well-being,” the CUNA wrote in correspondence to the Treasury Department […]

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Credit Union National Association (CUNA) officials are advocating that the Treasury Department consider a comprehensive digit assets framework that would enhance adoption efforts.

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“Credit unions have a long history of serving their members in a direct, individualized way that encourages their financial health and well-being,” the CUNA wrote in correspondence to the Treasury Department in the wake of its request for information on digital asset development. “Innovations related to digital assets provide a new and unique avenue for credit unions to continue this mission with a significant percentage of their members already invested in cryptocurrencies.”

CUNA officials indicated that the organization favors a comprehensive regulatory framework providing consistent oversight for similar products and services; clear data security and data privacy requirements; and a balance with regard to traditional financial services and fintechs as a means of ensuring consumers are able to utilize their most trusted financial partner.

Per the CUNA, digital assets possess the potential to provide an entry point for the unbanked to receive financial services. Officials added that credit union services extend far beyond deposit accounts.

In March President Joe Biden signed an executive order regarding innovation in digital assets. The document outlined a whole-of-government approach to addressing the risks while harnessing the potential benefits of digital assets and the underlying technology.

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